EXHIBIT 1.1
-----------
$2,500,000,000
NISOURCE INC.
COMMON STOCK
PREFERRED STOCK
GUARANTEES OF DEBT SECURITIES
NISOURCE FINANCE CORP.
DEBT SECURITIES
FULLY AND UNCONDITIONALLY GUARANTEED AS TO PAYMENT OF PRINCIPAL,
PREMIUM
(IF ANY) AND INTEREST (IF ANY) BY
NISOURCE INC.
UNDERWRITING AGREEMENT
1. INTRODUCTORY. NiSource Inc., a Delaware corporation
("NiSource"), proposes to issue and sell from time to time certain of
its common stock, par value $.01 per share ("Common Stock") and
preferred stock, and to issue guarantees of the debt securities issued
from time to time by NiSource Finance Corp. as described herein, and
NiSource Finance Corp., an Indiana corporation and a wholly owned
subsidiary of NiSource ("NiSource Finance"), proposes to issue and
sell from time to time certain of its unsecured debt securities, in
each case registered under the registration statement referred to in
Section 2(a) ("Registered Securities").
The Registered Securities constituting debt securities will be
issued under an indenture, dated as of November 14, 2000
("Indenture"), among NiSource Finance, NiSource and The Chase
Manhattan Bank, as Trustee, in one or more series, which series may
vary as to interest rates, maturities, redemption provisions, selling
prices and other terms. The Registered Securities constituting debt
securities will be guaranteed as to principal, premium, if any,
interest, if any, and additional amounts, if any, by NiSource pursuant
to the guarantee set forth in the Indenture, which guarantee will be
endorsed on each debt security, authenticated and delivered pursuant
to the Indenture (the "Guarantee" and, collectively, the
"Guarantees").
The Registered Securities constituting preferred stock may be
issued in one or more series, which series may vary as to dividend
rates, redemption provisions, selling prices and other terms.
Particular series or offerings of Registered Securities will be
sold pursuant to a Terms Agreement referred to in Section 3, for
resale in accordance with terms of offering determined at the time of
sale.
The Registered Securities involved in any such offering are
hereinafter referred to as the "Offered Securities". The firm or
firms which agree to purchase the Offered Securities are hereinafter
referred to as the "Underwriters" of such securities, and the
representative or representatives of the Underwriters, if any,
specified in a Terms Agreement referred to in Section 3 are
hereinafter referred to as the "Representatives"; provided, however,
that if the Terms Agreement does not specify any representative of the
Underwriters, the term "Representatives", as used in this Agreement
(other than in Sections 2(b), 5(d) and 6 and the second sentence of
Section 3), shall mean the Underwriters.
2. REPRESENTATIONS AND WARRANTIES OF NISOURCE AND NISOURCE
FINANCE. NiSource and NiSource Finance, as of the date of each Terms
Agreement referred to in Section 3, represent and warrant to, and
agree with, the Underwriters that:
(a) A registration statement (No. 333-49330), including a
prospectus, relating to the Registered Securities has been filed
with the Securities and Exchange Commission ("Commission") and
has become effective. Such registration statement, as amended at
the time of any Terms Agreement referred to in Section 3, is
hereinafter referred to as the "Registration Statement", and the
prospectus included in such Registration Statement, as
supplemented as contemplated by Section 3 to reflect the terms of
the Offered Securities (if they are debt securities or preferred
stock) and the terms of the offering of the Offered Securities,
as first filed with the Commission pursuant to and in accordance
with Rule 424(b) ("Rule 424(b)") under the Securities Act of 1933
("Act"), including all material incorporated by reference
therein, is hereinafter referred to as the "Prospectus". No
document has been or will be prepared or distributed in reliance
on Rule 434 under the Act.
(b) On the effective date of the registration statement
relating to the Registered Securities, such registration
statement conformed in all respects to the requirements of the
Act, the Trust Indenture Act of 1939 ("Trust Indenture Act") and
the rules and regulations of the Commission ("Rules and
Regulations") and did not include any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading, and on the date of each Terms Agreement referred to
in Section 3, the Registration Statement and the Prospectus will
conform in all respects to the requirements of the Act, the Trust
Indenture Act and the Rules and Regulations, and neither of such
documents will include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, except
that the foregoing does not apply to statements in or omissions
from any of such documents based upon written information
furnished to NiSource or NiSource Finance by any Underwriter
-2-
through the Representatives, if any, specifically for use
therein.
(c) NiSource has been duly incorporated and is an existing
corporation in good standing under the laws of the State of
Delaware, with power and authority (corporate and other) to own
its properties and conduct its business as described in the
Prospectus; and NiSource is duly qualified to transact business
as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification, or is
subject to no material liability or disability by reason of the
failure to be so qualified in any such jurisdiction.
(d) NiSource Finance has been duly incorporated and is an
existing corporation in good standing under the laws of the State
of Indiana, with power and authority (corporate and other) to own
its properties and conduct its business as described in the
Prospectus; and NiSource Finance is duly qualified to transact
business as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification, or is
subject to no material liability or disability by reason of the
failure to be so qualified in any such jurisdiction; all of the
issued and outstanding capital stock of NiSource Finance has been
duly authorized and validly issued and is fully paid and
nonassessable; and the capital stock of NiSource Finance is owned
by NiSource free from liens, encumbrances and defects.
(e) Each significant subsidiary (as defined in Rule 405
under the Act) of NiSource (each direct and indirect significant
subsidiary of NiSource other than NiSource Finance being
hereinafter referred to as a "SIGNIFICANT SUBSIDIARY" and all
such direct and indirect significant subsidiaries of NiSource
other than NiSource Finance being hereinafter referred to
collectively as the "SIGNIFICANT SUBSIDIARIES"), has been duly
incorporated and is an existing corporation in good standing
under the laws of the jurisdiction of its incorporation, with
power and authority (corporate and other) to own its properties
and conduct its business as described in the Prospectus; and each
Significant Subsidiary is duly qualified to do business as a
foreign corporation in good standing in all other jurisdictions
in which its ownership or lease of property or the conduct of its
business requires such qualification, or is subject to no
material liability or disability by reason of the failure to be
so qualified in any such jurisdiction; all of the issued and
outstanding capital stock of each Significant Subsidiary has been
duly authorized and validly issued and is fully paid and
nonassessable; and except as otherwise disclosed in the
Prospectus, all of the capital stock of each Significant
Subsidiary is owned by NiSource, directly or through
subsidiaries, free from liens, encumbrances and defects.
-3-
(f) If the Offered Securities are debt securities issued by
NiSource Finance and guaranteed by NiSource: The Indenture has
been duly authorized by each of NiSource and NiSource Finance and
has been duly qualified under the Trust Indenture Act; the
Offered Securities which are debt securities have been duly
authorized by NiSource Finance; the Offered Securities which are
Guarantees have been duly authorized by NiSource; and when the
Offered Securities are delivered and paid for pursuant to the
Terms Agreement on the Closing Date (as defined below) or
pursuant to Delayed Delivery Contracts (as hereinafter defined),
the Indenture will have been duly executed and delivered by each
of NiSource and NiSource Finance, such Offered Securities will
have been duly executed, authenticated, issued and delivered and
will conform to the descriptions thereof contained in the
Prospectus and the Indenture and such Offered Securities which
are debt securities will constitute valid and legally binding
obligations of NiSource Finance, and such Offered Securities
which are Guarantees of such debt securities will constitute
valid and legally binding obligations of NiSource, in each case,
enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles.
(g) If the Offered Securities are preferred stock: The
Offered Securities have been duly authorized and, when the
Offered Securities have been delivered and paid for in accordance
with the Terms Agreement on the Closing Date, such Offered
Securities will have been validly issued, fully paid and
nonassessable and will conform to the description thereof
contained in the Prospectus; and the stockholders of NiSource
have no preemptive rights with respect to the Offered Securities.
(h) If the Offered Securities are Common Stock: The
Offered Securities and all other outstanding shares of capital
stock of NiSource have been duly authorized; all outstanding
shares of capital stock of NiSource are, and, when the Offered
Securities have been delivered and paid for in accordance with
the Terms Agreement on the Closing Date, such Offered Securities
will have been validly issued, fully paid and nonassessable and
will conform to the description thereof contained in the
Prospectus; and the stockholders of NiSource have no preemptive
rights with respect to the Offered Securities.
(i) If the Offered Securities are convertible into Common
Stock: When the Offered Securities are delivered and paid for
pursuant to the Terms Agreement on the Closing Date, such Offered
Securities will be convertible into Common Stock of NiSource in
accordance with their terms (if the Offered Securities are
preferred stock) or the Indenture (if the Offered Securities are
debt securities); the shares of Common Stock initially issuable
upon conversion of such Offered Securities have been duly
-4-
authorized and reserved for issuance upon such conversion and,
when issued upon such conversion, will be validly issued, fully
paid and nonassessable; the outstanding shares of Common Stock
have been duly authorized and validly issued, are fully paid and
nonassessable and conform to the description thereof contained in
the Prospectus; and the stockholders of NiSource have no
preemptive rights with respect to the Common Stock.
(j) If the Offered Securities are Common Stock or are
convertible into Common Stock: Except as disclosed in the
Prospectus, there are no contracts, agreements or understandings
between NiSource or NiSource Finance and any person that would
give rise to a valid claim against NiSource, NiSource Finance or
any Underwriter for a brokerage commission, finder's fee or other
like payment in connection with the sale of the Offered
Securities.
(k) If the Offered Securities are Common Stock or are
convertible into Common Stock: Except for the obligations of
NiSource and NiSource Finance pursuant to the Registration Rights
Agreement dated November 9, 2000 and except for registration
obligations in connection with the remarketing of NiSource's
Stock Appreciation Income Linked Securities ("SAILS{SM}") and
Premium Income Equity Securities ("PIES{SM}"), there are no
contracts, agreements or understandings between NiSource or
NiSource Finance and any person granting such person the right to
require NiSource or NiSource Finance to file a registration
statement under the Act with respect to any securities of
NiSource or NiSource Finance owned or to be owned by such person
or to require NiSource or NiSource Finance to include such
securities with the securities registered pursuant to the
Registration Statement or with any securities being registered
pursuant to any other registration statement filed by NiSource or
NiSource Finance under the Act.
(l) If the Offered Securities are Common Stock or are
convertible into Common Stock: The outstanding shares of Common
Stock are listed on The New York Stock Exchange (the "Stock
Exchange") and the Offered Securities (if they are Common Stock)
or the Common Stock into which the Offered Securities are
convertible (if they are convertible) have been approved for
listing on the Stock Exchange, subject to notice of issuance. If
the Offered Securities are debt securities or preferred stock:
The Offered Securities have been approved for listing on the
stock exchange indicated in the Terms Agreement, subject to
notice of issuance.
(m) No consent, approval, authorization, or order of, or
filing with, any governmental agency or body or any court is
required for the consummation of the transactions contemplated by
the Terms Agreement (including the provisions of this Agreement)
in connection with the issuance and sale of the Offered
-5-
Securities by NiSource and/or NiSource Finance, as the case may
be, except such as have been obtained and made under the Act and,
if the Offered Securities are debt securities, the Trust
Indenture Act, and such as may be required under the Public
Utility Holding Company Act of 1935, as amended, and under state
securities laws.
(n) The execution, delivery and performance of the
Indenture (if the Offered Securities are debt securities), the
Terms Agreement (including the provisions of this Agreement) and
any Delayed Delivery Contracts and the issuance and sale of the
Offered Securities and, if the Offered Securities are debt
securities issued by NiSource Finance and guaranteed by NiSource
or preferred stock, compliance with the terms and provisions
thereof will not result in a breach or violation of any of the
terms and provisions of, or constitute a default under, (i) the
charter or by-laws of NiSource, NiSource Finance or any
subsidiary of NiSource (each direct and indirect subsidiary of
NiSource other than NiSource Finance being hereinafter referred
to as a "Subsidiary" and all such direct and indirect
subsidiaries of NiSource other than NiSource Finance being
hereinafter referred to collectively as the "Subsidiaries"), (ii)
any statute, any rule, regulation or order of any governmental
agency or body or any court, domestic or foreign, having
jurisdiction over NiSource, NiSource Finance or any Subsidiary or
any of their properties, or (iii) any agreement or instrument to
which NiSource, NiSource Finance or any Subsidiary is a party or
by which NiSource, NiSource Finance or any Subsidiary is bound or
to which any of the properties of NiSource, NiSource Finance or
any Subsidiary is subject, except in the case of clauses (ii)
and (iii) where such violation, breach or default would not,
individually or in the aggregate, have a material adverse effect
on the condition (financial or other), business, properties or
results of operations of NiSource, NiSource Finance and the
Subsidiaries taken as a whole ("Material Adverse Effect") and
would not materially and adversely affect the ability of either
NiSource or NiSource Finance to perform its obligations under the
Indenture (if the Offered Securities are debt securities issued
by NiSource Finance and guaranteed by NiSource), the Terms
Agreement (including the provisions of this Agreement) or any
Delayed Delivery Contracts, or which would otherwise be material
in the context of the sale of the Offered Securities; and each of
NiSource and NiSource Finance has full power and authority to
authorize, issue and sell the Offered Securities as contemplated
by the Terms Agreement (including the provisions of this
Agreement).
(o) The Terms Agreement (including the provisions of this
Agreement) and, if the Offered Securities are debt securities or
preferred stock, any Delayed Delivery Contracts have each been
duly authorized, executed and delivered by NiSource and/or
NiSource Finance, as the case may be.
-6-
(p) Except as disclosed in the Prospectus, NiSource,
NiSource Finance and the Subsidiaries have good and marketable
title to all real properties and all other properties and assets
owned by them, in each case free from liens, encumbrances and
defects that would materially interfere with the use made or to
be made thereof by them or would, individually or in the
aggregate, have a Material Adverse Effect; and except as
disclosed in the Prospectus, NiSource, NiSource Finance and the
Subsidiaries hold any leased real or personal property under
valid and enforceable leases with no exceptions that would
materially interfere with the use made or to be made thereof by
them or would, individually or in the aggregate, have a Material
Adverse Effect.
(q) NiSource, NiSource Finance and the Subsidiaries possess
adequate certificates, authorities or permits issued by
appropriate governmental agencies or bodies necessary to conduct
the business now operated by them and have not received any
notice of proceedings relating to the revocation or modification
of any such certificate, authority or permit that, if determined
adversely to NiSource, NiSource Finance or any of the
Subsidiaries would individually or in the aggregate have a
Material Adverse Effect.
(r) Except as disclosed in the Prospectus, none of
NiSource, NiSource Finance or any Significant Subsidiary has any
material contingent liability.
(s) Except as disclosed in the Prospectus, there are no
pending actions, suits, proceedings or investigations against or
affecting NiSource, NiSource Finance or any Subsidiary or any of
their respective properties, assets or operations that could,
individually or in the aggregate, be reasonably expected to have
a Material Adverse Effect or to affect materially and adversely
the ability of either NiSource or NiSource Finance to perform its
obligations under the Indenture (if the Offered Securities are
debt securities issued by NiSource Finance and guaranteed by
NiSource), the Terms Agreement (including the provisions of this
Agreement) or any Delayed Delivery Contracts, or which are
otherwise material in the context of the sale of the Offered
Securities; and no such actions, suits, proceedings or
investigations are threatened or, to the knowledge of NiSource or
NiSource Finance, contemplated.
(t) The financial statements of NiSource, NiSource Inc., an
Indiana corporation and a predecessor of NiSource ("NiSource
Indiana"), and Columbia Energy Group, a Delaware corporation and
a predecessor of NiSource ("Columbia Energy"), included in the
Registration Statement and Prospectus present fairly the
financial position of the entity presented and its consolidated
subsidiaries as of the dates shown and their results of
operations and cash flows for the periods shown, and, except as
-7-
otherwise disclosed in the Prospectus, such financial statements
have been prepared in conformity with generally accepted
accounting principles in the United States applied on a
consistent basis with all other financial statements presented
for such entity; any schedules included in the Registration
Statement present fairly the information required to be stated
therein; and the assumptions used in preparing the pro forma
financial statements, the other pro forma financial information
and the adjusted capitalization included in the Registration
Statement and the Prospectus provide a reasonable basis for
presenting the significant effects directly attributable to the
transactions or events described therein, the related pro forma
adjustments give appropriate effect to those assumptions, and the
pro forma columns therein reflect the proper application of those
adjustments to the corresponding historical financial statement
amounts.
(u) Except as disclosed in the Prospectus, since the date
of the latest audited financial statements included in the
Prospectus there has been no material adverse change, nor any
development or event involving a prospective material adverse
change, in the condition (financial or other), business,
properties or results of operations of NiSource, NiSource Finance
and the Subsidiaries taken as a whole, and, except as disclosed
in or contemplated by the Prospectus, there has been no dividend
or distribution of any kind declared, paid or made by either
NiSource or NiSource Finance on any class of its capital stock.
(v) Neither NiSource nor NiSource Finance is and, after
giving effect to the offering and sale of the Offered Securities
and the application of the proceeds thereof as described in the
Prospectus, neither will be an "investment company" as defined in
the Investment Company Act of 1940.
(w) NiSource is a "public utility holding company" within
the meaning of the Public Utility Holding Company Act of 1935, as
amended, and is registered in compliance therewith. All
necessary approvals under the Public Utility Holding Company Act
of 1935, as amended, for the issuance and sale of the Offered
Securities and, if the Offered Securities are preferred stock or
debt securities issued by NiSource Finance and guaranteed by
NiSource, compliance with the terms and provisions thereof, have
been obtained.
(x) Neither NiSource, NiSource Finance nor any affiliate of
either of them does business with the government of Cuba or with
any person or affiliate located in Cuba within the meaning of
Section 517.075, Florida Statutes and each of NiSource and
NiSource Finance agrees to comply with such Section if prior to
the completion of the distribution of the Offered Securities it
commences doing such business.
-8-
3. PURCHASE AND OFFERING OF OFFERED SECURITIES. The
obligations of the Underwriters to purchase the Offered Securities
will be evidenced by an agreement or exchange of other written
communications ("Terms Agreement") at the time NiSource and/or
NiSource Finance, as the case may be, determines to sell the Offered
Securities. The Terms Agreement will incorporate by reference the
provisions of this Agreement, except as otherwise provided therein,
and will specify the firm or firms which will be Underwriters, the
names of the Representatives, the principal amount or number of shares
to be purchased by each Underwriter, the purchase price to be paid by
the Underwriters and (if the Offered Securities are debt securities or
preferred stock) the terms of the Offered Securities not already
specified (in the Indenture, in the case of Offered Securities that
are debt securities), including, but not limited to, interest rate (if
debt securities), dividend rate (if preferred stock), maturity (if
debt securities), any redemption provisions and any sinking fund
requirements and whether any of the Offered Securities may be sold to
institutional investors pursuant to Delayed Delivery Contracts (as
defined below). The Terms Agreement will also specify the time and
date of delivery and payment (such time and date, or such other time
not later than seven full business days thereafter as the Underwriter
first named in the Terms Agreement (the "Lead Underwriter") and
NiSource and/or NiSource Finance, as the case may be, agree as the
time for payment and delivery, being herein and in the Terms Agreement
referred to as the "Closing Date"), the place of delivery and payment
and any details of the terms of offering that should be reflected in
the prospectus supplement relating to the offering of the Offered
Securities. For purposes of Rule 15c6-1 under the Securities Exchange
Act of 1934, the Closing Date (if later than the otherwise applicable
settlement date) shall be the date for payment of funds and delivery
of securities for all the Offered Securities sold pursuant to the
offering, other than Contract Securities (as defined below) for which
payment of funds and delivery of securities shall be as hereinafter
provided. The obligations of the Underwriters to purchase the Offered
Securities will be several and not joint. It is understood that the
Underwriters propose to offer the Offered Securities for sale as set
forth in the Prospectus.
If the Terms Agreement provides for sales of Offered Securities
pursuant to delayed delivery contracts, NiSource and/or NiSource
Finance, as the case may be, authorize the Underwriters to solicit
offers to purchase Offered Securities pursuant to delayed delivery
contracts substantially in the form of Annex I attached hereto
("Delayed Delivery Contracts") with such changes therein as NiSource
and/or NiSource Finance, as the case may be, may authorize or approve.
Delayed Delivery Contracts are to be with institutional investors,
including commercial and savings banks, insurance companies, pension
funds, investment companies and educational and charitable
institutions. On the Closing Date NiSource and/or NiSource Finance
will pay, as compensation, to the Representatives for the accounts of
the Underwriters, the fee set forth in such Terms Agreement in respect
of the principal amount or number of shares of Offered Securities to
-9-
be sold pursuant to Delayed Delivery Contracts ("Contract
Securities"). The Underwriters will not have any responsibility in
respect of the validity or the performance of Delayed Delivery
Contracts. If NiSource and/or NiSource Finance execute and deliver
Delayed Delivery Contracts, the Contract Securities will be deducted
from the Offered Securities to be purchased by the several
Underwriters and the aggregate principal amount or number of shares of
Offered Securities to be purchased by each Underwriter will be reduced
pro rata in proportion to the principal amount or number of shares of
Offered Securities set forth opposite each Underwriter's name in such
Terms Agreement, except to the extent that the Lead Underwriter
determines that such reduction shall be otherwise than pro rata and so
advises NiSource and/or NiSource Finance. NiSource and/or NiSource
Finance will advise the Lead Underwriter not later than the business
day prior to the Closing Date of the principal amount or number of
shares of Contract Securities.
If the Offered Securities are preferred stock or Common Stock,
the certificates for the Offered Securities delivered to the
Underwriters on the Closing Date will be in definitive form, and if
the Offered Securities are debt securities, the Offered Securities
delivered to the Underwriters on the Closing Date will be in
definitive fully registered form, in each case in such denominations
and registered in such names as the Lead Underwriter requests.
If the Offered Securities are debt securities and the Terms
Agreement specifies "Book-Entry Only" settlement or otherwise states
that the provisions of this paragraph shall apply, NiSource Finance
will deliver against payment of the purchase price the Offered
Securities in the form of one or more permanent global securities in
definitive form (the "Global Securities") deposited with the Trustee
as custodian for The Depository Trust Company ("DTC") and registered
in the name of Cede & Co., as nominee for DTC. Interests in any
permanent global securities will be held only in book-entry form
through DTC, except in the limited circumstances described in the
Prospectus. Payment for the Offered Securities shall be made by the
Underwriters in Federal (same day) funds by official check or checks
or wire transfer to an account previously designated by NiSource
Finance at a bank acceptable to the Lead Underwriter, in each case
drawn to the order of NiSource Finance at the place of payment
specified in the Terms Agreement on the Closing Date, against delivery
to the Trustee as custodian for DTC of the Global Securities
representing all of the Offered Securities.
4. CERTAIN AGREEMENTS OF NISOURCE AND NISOURCE FINANCE. Each
of NiSource and NiSource Finance agrees with the several Underwriters
that it will furnish to counsel for the Underwriters, one copy of the
executed registration statement relating to the Registered Securities,
including all exhibits, in the form it became effective and of all
amendments thereto and that, in connection with each offering of
Offered Securities:
-10-
(a) NiSource and NiSource Finance will file the Prospectus
with the Commission pursuant to and in accordance with Rule
424(b)(2) (or, if applicable and if consented to by the Lead
Underwriter, subparagraph (5)) not later than the second business
day following the execution and delivery of the Terms Agreement.
(b) NiSource and NiSource Finance will advise the Lead
Underwriter promptly of any proposal to amend or supplement the
Registration Statement or the Prospectus and will afford the Lead
Underwriter a reasonable opportunity to comment on any such
proposed amendment or supplement; and NiSource and NiSource
Finance will also advise the Lead Underwriter promptly of the
filing of any such amendment or supplement and of the institution
by the Commission of any stop order proceedings in respect of the
Registration Statement or of any part thereof and will use its
best efforts to prevent the issuance of any such stop order and
to obtain as soon as possible its lifting, if issued.
(c) NiSource will comply with the provisions of the Act,
the Securities Exchange Act of 1934, as amended, and the Rules
and Regulations so as to permit completion of the distribution of
the Offered Securities as contemplated by the applicable Terms
Agreement (including the provisions of this Agreement), the
Registration Statement and the Prospectus. If, at any time when
a prospectus relating to the Offered Securities is required to be
delivered under the Act in connection with sales by any
Underwriter or dealer, any event occurs as a result of which the
Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, or
if it is necessary at any time to amend the Prospectus to comply
with the Act, NiSource and NiSource Finance promptly will notify
the Lead Underwriter of such event and will promptly prepare and
file with the Commission, at the expense of NiSource and NiSource
Finance, an amendment or supplement which will correct such
statement or omission or an amendment which will effect such
compliance. Neither the Lead Underwriter's consent to, nor the
Underwriters' delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section
5 hereof.
(d) As soon as practicable, but not later than 16 months,
after the date of each Terms Agreement, NiSource will make
generally available to its securityholders an earnings statement
covering a period of at least 12 months beginning after the later
of (i) the effective date of the registration statement relating
to the Registered Securities, (ii) the effective date of the most
recent post-effective amendment to the Registration Statement to
become effective prior to the date of such Terms Agreement and
(iii) the date of NiSource's most recent Annual Report on Form
10-K filed with the Commission prior to the date of such Terms
-11-
Agreement, which will satisfy the provisions of Section 11(a) of
the Act.
(e) NiSource or NiSource Finance will furnish to the
Representatives copies of the Registration Statement, including
all exhibits, any related preliminary prospectus, any related
preliminary prospectus supplement, the Prospectus and all
amendments and supplements to such documents, in each case as
soon as available and in such quantities as the Lead Underwriter
reasonably requests. NiSource or NiSource Finance will pay the
expenses of printing and distributing to the Underwriters all
such documents.
(f) NiSource or NiSource Finance will arrange for the
qualification of the Offered Securities for sale under the laws
of such jurisdictions as the Lead Underwriter designates and will
continue such qualifications in effect so long as required for
the distribution, provided that, in connection with such
qualification, neither NiSource nor NiSource Finance shall be
required to qualify as a foreign corporation or file a general
consent to service of process in any such jurisdiction.
(g) During the period of five years after the date of any
Terms Agreement, NiSource will furnish to the Representatives
and, upon request, to each of the other Underwriters, if any, as
soon as practicable after the end of each fiscal year, a copy of
its annual report to stockholders for such year; and NiSource
will furnish to the Representative (i) as soon as available, a
copy of each report and any definitive proxy statement of
NiSource filed with the Commission under the Securities Exchange
Act of 1934 or mailed to stockholders, and (ii) from time to
time, such other information concerning NiSource or NiSource
Finance as the Lead Underwriter may reasonably request.
(h) Each of NiSource and/or NiSource Finance, as the case
may be, will pay all expenses incident to the performance of its
obligations under the Terms Agreement (including the provisions
of this Agreement), any filing fees or other expenses (including
fees and disbursements of counsel) in connection with
qualification of the Registered Securities for sale under the
laws of such jurisdictions as the Lead Underwriter may designate
and the printing of memoranda relating thereto, any fees charged
by investment rating agencies for the rating of the Offered
Securities (if they are debt securities or preferred stock), any
applicable filing fee incident to, and the reasonable fees and
disbursements of counsel for the Underwriters in connection with,
any review by the National Association of Securities Dealers,
Inc. of the Registered Securities, and any travel expenses of its
officers and employees and any other expenses incurred by it in
connection with attending or hosting meetings with prospective
purchasers of Registered Securities.
-12-
(i) If the Offered Securities are debt securities or
preferred stock, neither NiSource nor NiSource Finance will
offer, sell, contract to sell, pledge or otherwise dispose of,
directly or indirectly, or file with the Commission a
registration statement under the Act relating to United States
dollar-denominated debt securities issued by NiSource Finance and
guaranteed by NiSource and having a maturity of more than one
year from the date of issue (if the Offered Securities are debt
securities) or any series of preferred stock issued by NiSource
(if the Offered Securities are preferred stock), or publicly
disclose the intention to make any such offer, sale, pledge,
disposition or filing, without the prior written consent of the
Lead Underwriter for a period beginning at the time of execution
of the Terms Agreement and ending the number of days after the
Closing Date specified under "Blackout" in the Terms Agreement.
(j) If the Offered Securities are Common Stock or are
convertible into Common Stock, NiSource will not offer, sell,
contract to sell, pledge or otherwise dispose of, directly or
indirectly, or file with the Commission a registration statement
under the Act relating to, any additional shares of its Common
Stock or securities convertible into or exchangeable or
exercisable for any shares of its Common Stock, or publicly
disclose the intention to make any such offer, sale, pledge,
disposition or filing, without the prior written consent of the
Lead Underwriter for a period beginning at the time of execution
of the Terms Agreement and ending the number of days after the
Closing Date specified under "Blackout" in the Terms Agreement,
except issuances of Common Stock pursuant to the conversion or
exchange of convertible or exchangeable securities or the
exercise of warrants or options, in each case outstanding on the
date of the Terms Agreement, grants of employee stock options
pursuant to the terms of a plan in effect on the date of the
Terms Agreement, or issuances of Common Stock pursuant to the
exercise of such options.
5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITER. The
obligations of the several Underwriters to purchase and pay for the
Offered Securities will be subject to the accuracy of the
representations and warranties on the part of NiSource and NiSource
Finance herein, to the accuracy of the statements of officers of
NiSource and NiSource Finance made pursuant to the provisions hereof,
to the performance by each of NiSource and NiSource Finance of its
obligations hereunder and to the following additional conditions
precedent:
(a) On or prior to the date of the Terms Agreement, the
Representatives shall have received a letter, dated the date of
delivery thereof, of Arthur Andersen LLP (Chicago) confirming
that they are independent public accountants within the meaning
of the Act and the applicable published Rules and Regulations
thereunder and stating to the effect that:
-13-
(i) in their opinion the financial statements and any
schedules and any summary of earnings of NiSource and of NiSource
Indiana examined by them and included in the Prospectus comply as
to form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and
Regulations;
(ii) they have performed the procedures specified by
the American Institute of Certified Public Accountants for a
review of interim financial information as described in Statement
of Auditing Standards No. 71, Interim Financial Information, on
the unaudited financial statements included in the Registration
Statement;
(iii) on the basis of the review referred to in clause
(ii) above, a reading of the latest available interim financial
statements of NiSource, inquiries of officials of NiSource who
have responsibility for financial and accounting matters and
other specified procedures, nothing came to their attention that
caused them to believe that:
(A) the unaudited financial statements, if any,
and any summary of earnings included in the Prospectus do
not comply as to form in all material respects with the
applicable accounting requirements of the Act and the
related published Rules and Regulations or any material
modifications should be made to such unaudited financial
statements and summary of earnings for them to be in
conformity with generally accepted accounting principles;
(B) if any unaudited "capsule" information is
contained in the Prospectus, the unaudited consolidated
operating revenues, gross income, net income and net income
per share amounts or other amounts constituting such
"capsule" information and described in such letter do not
agree with the corresponding amounts set forth in the
unaudited consolidated financial statements or were not
determined on a basis substantially consistent with that of
the corresponding amounts in the audited statements of
income;
(C) at the date of the latest available balance
sheet read by such accountants, or at a subsequent specified
date not more than three business days prior to the date of
such letter, there was any change in the capital stock or
any increase in short-term indebtedness or long-term debt of
NiSource and its consolidated subsidiaries or, at the date
of the latest available balance sheet read by such
accountants, there was any decrease in consolidated net
current assets or net assets, as compared with amounts shown
on the latest balance sheet included in the Prospectus;
except in all cases set forth in this clause (C) for
-14-
changes, increases or decreases which the Prospectus
discloses have occurred or may occur or which are described
in such letter; or
(D) for the period from the closing date of the
latest income statement included in the Prospectus to the
closing date of the latest available income statement read
by such accountants there were any decreases, as compared
with the corresponding period of the previous year and with
the period of corresponding length ended the date of the
latest income statement included in the Prospectus, in
consolidated operating revenues, operating income or net
income; except in all cases set forth in this clause (D)
for changes, increases or decreases which the Prospectus
discloses have occurred or may occur or which are described
in such letter;
(iv)(A) they have read the pro forma financial
statements and other pro forma financial information
included in the Prospectus (collectively, the "Pro Forma
Information");
(B) they have made inquiries of certain officials
of NiSource who have responsibility for financial and
accounting matters about the basis for the pro forma
adjustments;
(C) they have proved the arithmetic accuracy of
the application of the pro forma adjustments to the
historical amounts in the Pro Forma Information and whether
the Pro Forma Information complies as to form in all
material respects with the accounting requirements of the
Act and the related published Rules and Regulations; and
(D) on the basis of such procedures, and such
other inquiries and procedures as may be specified in such
letter, nothing came to their attention that caused them to
believe that the Pro Forma Information included in the
Prospectus does not comply as to form in all material
respects with the accounting requirements of the Act and the
related published Rules and Regulations or has not been
properly compiled and that the pro forma adjustments have
not been properly applied to the historical amounts in the
compilation of those statements; and
(v) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other
financial information contained in the Prospectus (in each
case to the extent that such dollar amounts, percentages and
other financial information are derived from the general
accounting records of NiSource subject to the internal
controls of the accounting system of NiSource or are derived
-15-
from such records by analysis or computation) with the
results obtained from inquiries, a reading of such general
accounting records and other procedures specified in such
letter and have found such dollar amounts, percentages and
other financial information to be in agreement with such
results, except as otherwise specified in such letter.
All financial statements and schedules included in material
incorporated by reference into the Prospectus shall be deemed included
in the Prospectus for purposes of this subsection.
(b) On or prior to the date of the Terms Agreement, the
Representatives shall have received a letter, dated the date of
delivery thereof, of Arthur Andersen LLP (New York) confirming that
they are independent public accountants within the meaning of the Act
and the applicable published Rules and Regulations thereunder and
stating to the effect that:
(i) in their opinion the financial statements and any
schedules and any summary of earnings of Columbia Energy examined
by them and included in the Prospectus comply as to form in all
material respects with the applicable accounting requirements of
the Act and the related published Rules and Regulations;
(ii) they have performed the procedures specified by
the American Institute of Certified Public Accountants for a
review of interim financial information as described in Statement
of Auditing Standards No. 71, Interim Financial Information, on
the unaudited financial statements included in the Registration
Statement;
(iii) on the basis of the review referred to in clause
(ii) above, a reading of the latest available interim financial
statements of Columbia Energy, inquiries of officials of Columbia
Energy who have responsibility for financial and accounting
matters and other specified procedures, nothing came to their
attention that caused them to believe that:
(A) the unaudited financial statements, if any,
and any summary of earnings included in the Prospectus do
not comply as to form in all material respects with the
applicable accounting requirements of the Act and the
related published Rules and Regulations or any material
modifications should be made to such unaudited financial
statements and summary of earnings for them to be in
conformity with generally accepted accounting principles;
(B) if any unaudited "capsule" information is
contained in the Prospectus, the unaudited consolidated
operating revenues, gross income, net income and net income
per share amounts or other amounts constituting such
"capsule" information and described in such letter do not
-16-
agree with the corresponding amounts set forth in the
unaudited consolidated financial statements or were not
determined on a basis substantially consistent with that of
the corresponding amounts in the audited statements of
income;
(C) the date of the latest available balance
sheet read by such accountants, or at a subsequent specified
date not more than three business days prior to the date of
such letter, there was any change in the capital stock or
any increase in short-term indebtedness or long-term debt of
Columbia Energy and its consolidated subsidiaries or, at the
date of the latest available balance sheet read by such
accountants, there was any decrease in consolidated net
current assets or net assets, as compared with amounts shown
on the latest balance sheet included in the Prospectus;
except in all cases set forth in this clause (C) for
changes, increases or decreases which the Prospectus
discloses have occurred or may occur or which are described
in such letter; or
(D) for the period from the closing date of the
latest income statement included in the Prospectus to the
closing date of the latest available income statement read
by such accountants there were any decreases, as compared
with the corresponding period of the previous year and with
the period of corresponding length ended the date of the
latest income statement included in the Prospectus, in
consolidated operating revenues, operating income or net
income; except in all cases set forth in this clause (D) for
changes, increases or decreases which the Prospectus
discloses have occurred or may occur or which are described
in such letter; and
(iv) they have compared specified dollar amounts
(or percentages derived from such dollar amounts) and other
financial information contained in the Prospectus (in each
case to the extent that such dollar amounts, percentages and
other financial information are derived from the general
accounting records of Columbia Energy, subject to the
internal controls of the accounting system of Columbia
Energy or are derived from such records by analysis or
computation) with the results obtained from inquiries, a
reading of such general accounting records and other
procedures specified in such letter and have found such
dollar amounts, percentages and other financial information
to be in agreement with such results, except as otherwise
specified in such letter.
All financial statements and schedules included in material
incorporated by reference into the Prospectus shall be deemed included
in the Prospectus for purposes of this subsection.
-17-
(c) The Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 4(a) of this
Agreement. No stop order suspending the effectiveness of the
Registration Statement or of any part thereof shall have been issued
and no proceedings for that purpose shall have been instituted or, to
the knowledge of NiSource, NiSource Finance or any Underwriter, shall
be contemplated by the Commission.
(d) Subsequent to the execution of the Terms Agreement, there
shall not have occurred (i) any change, or any development or event
involving a prospective change, in the condition (financial or other),
business, properties or results of operations of NiSource, NiSource
Finance and the Subsidiaries taken as one enterprise which, in the
judgment of a majority in interest of the Underwriters including any
Representatives, is material and adverse and makes it impractical or
inadvisable to proceed with completion of the public offering or the
sale of and payment for the Offered Securities; (ii) any downgrading
in the rating of any debt securities or preferred stock of NiSource or
NiSource Finance, as the case may be, by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule
436(g) under the Act), or any public announcement that any such
organization has under surveillance or review its rating of any debt
securities or preferred stock of NiSource or NiSource Finance, as the
case may be (other than an announcement with positive implications of
a possible upgrading, and no implication of a possible downgrading, of
such rating); (iii) any material suspension or material limitation of
trading in securities generally on the Stock Exchange, or any setting
of minimum prices for trading on such exchange, or any suspension of
trading of any securities of NiSource or NiSource Finance on any
exchange or in the over-the-counter market; (iv) any banking
moratorium declared by U.S. Federal or New York authorities; or (v)
any outbreak or escalation of major hostilities in which the United
States is involved, any declaration of war by Congress or any other
substantial national or international calamity or emergency if, in the
judgment of a majority in interest of the Underwriters, including any
Representatives, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable
to proceed with completion of the public offering or the sale of and
payment for the Offered Securities.
(e) The Representatives shall have received an opinion, dated
the Closing Date, of Schiff Hardin & Waite, counsel for NiSource and
NiSource Finance, to the effect that:
(i) NiSource has been duly incorporated and is a
validly existing corporation in good standing under the laws of
the State of Delaware, with corporate power and authority to own
its properties and conduct its business as described in the
Prospectus; and NiSource is duly qualified to transact business
as a foreign corporation and is in good standing under the laws
of the State of Indiana;
-18-
(ii) NiSource Finance has been duly incorporated and is
a validly existing corporation under the laws of the State of
Indiana, with corporate power and authority to own its properties
and conduct its business as described in the Prospectus;
(iii) If the Offered Securities are debt securities
issued by NiSource Finance and guaranteed by NiSource: The
Indenture has been duly authorized, executed and delivered by
each of NiSource and NiSource Finance and has been duly qualified
under the Trust Indenture Act; the Offered Securities which are
debt securities have been duly authorized by NiSource Finance;
the Offered Securities which are Guarantees have been duly
authorized by NiSource; the Offered Securities which are debt
securities have been duly executed and, when authenticated in
accordance with the terms of the Indenture and delivered to and
paid for by the Underwriters in accordance with the provisions of
the Terms Agreement (including the provisions of this Agreement)
or sold pursuant to Delayed Delivery Contracts, will constitute,
legal, valid and binding obligations of NiSource Finance
enforceable against NiSource Finance in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to
general equity principles; the Offered Securities which are
guarantees of debt securities have been duly executed and, when
the debt securities on which the guarantees are endorsed are
authenticated in accordance with the terms of the Indenture and
delivered to and paid for by the Underwriters in accordance with
the provisions of the Terms Agreement (including the provisions
of this Agreement) or sold pursuant to Delayed Delivery
Contracts, will constitute, legal, valid and binding obligations
of NiSource entitled to the benefits of the Indenture and
enforceable against NiSource in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to
general equity principles; and the Offered Securities other than
any Contract Securities conform, and any Contract Securities,
when so delivered and sold will conform, as to legal matters in
all material respects to the descriptions thereof contained in
the Prospectus;
(iv) If the Offered Securities are preferred stock: The
Offered Securities have been duly authorized; the Offered
Securities other than any Contract Securities when delivered to
and paid for by the Underwriters in accordance with the
provisions of the Terms Agreement (including the provisions of
this Agreement) will be validly issued, fully paid and
nonassessable; any Contract Securities, when delivered and sold
pursuant to Delayed Delivery Contracts, will be validly issued,
fully paid and non-assessable; and the Offered Securities other
than any Contract Securities conform, and any Contract
-19-
Securities, when so delivered and sold, will conform, as to legal
matters in all material respects to the descriptions thereof
contained in the Prospectus; and the stockholders of NiSource
have no statutory preemptive rights with respect to the Offered
Securities;
(v) If the Offered Securities are Common Stock: The
Offered Securities have been duly authorized and when delivered
to and paid for by the underwriters in accordance with the
provisions of the Terms Agreement (including the provisions of
this Agreement) will be validly issued, fully paid and
nonassessable and conform as to legal matters in all material
respects to the description thereof contained in the Prospectus;
and the stockholders of NiSource have no statutory preemptive
rights with respect to the Offered Securities;
(vi) If the Offered Securities are convertible into
Common Stock: The Offered Securities other than any Contract
Securities are, and any Contract Securities, when (if the Offered
Securities are debt securities) executed, authenticated, issued
and delivered in the manner provided in the Indenture and sold
pursuant to Delayed Delivery Contracts or (if the Offered
Securities are preferred stock) when issued, delivered and sold
pursuant to Delayed Delivery Contracts, will be convertible into
Common Stock in accordance with (if they are debt securities) the
Indenture or (if they are preferred stock) their terms; the
shares of Common Stock initially issuable upon conversion of the
Offered Securities have been duly authorized and reserved for
issuance upon such conversion and, when issued upon such
conversion, will be validly issued, fully paid and nonassessable;
the Common Stock conforms as to legal matters in all material
respects to the description thereof contained in the Prospectus;
and the stockholders of NiSource have no statutory preemptive
rights with respect to the Common Stock;
(vii) If the Offered Securities are Common Stock or
are convertible into Common Stock: Except for the obligations of
NiSource and NiSource Finance pursuant to the Registration Rights
Agreement dated November 9, 2000 and except for registration
obligations in connection with the remarketing of NiSource's
SAILS and PIES, there are no contracts, agreements or
understandings known to such counsel between NiSource or NiSource
Finance and any person granting such person the right to require
NiSource or NiSource Finance to file a registration statement
under the Act with respect to any securities of NiSource or
NiSource Finance owned or to be owned by such person or to
require NiSource or NiSource Finance to include such securities
with the securities registered pursuant to the Registration
Statement or with any securities being registered pursuant to any
other registration statement filed by NiSource or NiSource
Finance under the Act;
-20-
(viii) Neither the execution and delivery by each of
NiSource and NiSource Finance of the Terms Agreement (including
the provisions of this Agreement) nor the performance by each of
NiSource and NiSource Finance of their respective obligations
under the Terms Agreement (including the provisions of this
Agreement) requires any consent or approval of any nature from or
filing with any governmental authority of any of the State of
Illinois, the State of Indiana or the United States of America,
nor is any such consent, approval or filing required by the
Delaware General Corporation Law;
(ix) NiSource is a "public utility holding company"
within the meaning of the Public Utility Holding Company Act of
1935, as amended, and is registered in compliance therewith. All
necessary approvals under the Public Utility Holding Company Act
of 1935, as amended, for the issuance and sale of the Offered
Securities and, if the Offered Securities are preferred stock or
debt securities issued by NiSource Finance and guaranteed by
NiSource, compliance with the terms and provisions thereof, have
been obtained, except to the extent that any failure to obtain
such approvals or to comply with the terms thereof, individually
or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect or to materially and adversely affect the
ability of either NiSource or NiSource Finance to perform its
obligations under the Indenture (if the Offered Securities are
debt securities issued by NiSource Finance and guaranteed by
NiSource), the Terms Agreement (including the provisions of this
Agreement) or any Delayed Delivery Contracts, or which would
otherwise not be material in the context of the sale of the
Offered Securities;
(x) Neither NiSource nor NiSource Finance is and,
after giving effect to the offering and sale of the Offered
Securities and the application of the proceeds thereof as
described in the Prospectus, neither will be an "investment
company" as defined in the Investment Company Act of 1940;
(xi) Each of the Significant Subsidiaries has been duly
incorporated and is a corporation validly existing and, where
applicable, in good standing under the laws of the jurisdiction
of its incorporation, with corporate power and authority to own
its properties and to conduct its business as described in the
Prospectus; and each Significant Subsidiary is duly qualified to
transact business as a foreign corporation in good standing in
each of the jurisdictions set forth opposite the name of such
Significant Subsidiary on a schedule attached to the opinion;
(xii) To the knowledge of such counsel, based in part
upon a review of the stock register of each of NiSource Finance,
NiSource Capital Markets, Inc., Columbia Energy and Northern
Indiana Public Service Company (collectively, the "SPECIFIED
SUBSIDIARIES"), all of the issued and outstanding capital stock
-21-
of each of the Specified Subsidiaries (except for, as disclosed
in the Prospectus, the issued and outstanding shares of preferred
stock of Northern Indiana Public Service Company) is owned by
NiSource, directly or through subsidiaries. There is no
perfected lien upon the outstanding shares of capital stock of
any of the Specified Subsidiaries and, to the knowledge of such
counsel, there is no other lien, security interest, charge or
encumbrance upon the capital stock of any of the Specified
Subsidiaries;
(xiii) To the knowledge of such counsel, except as
disclosed in the Prospectus, there are no pending or threatened
actions, suits, proceedings or investigations against or
affecting NiSource, NiSource Finance or any Subsidiary or any of
their respective properties, assets or operations that could
reasonably be expected to, individually or in the aggregate,
materially and adversely affect the ability of either NiSource or
NiSource Finance to perform its obligations under the Terms
Agreement (including the provisions of this Agreement) or which
could be reasonably be expected to have a Material Adverse
Effect;
(xiv) The execution and delivery by each of NiSource
and NiSource Finance of the Terms Agreement (including the
provisions of this Agreement) do not, and the performance by each
of NiSource and NiSource Finance of its respective obligations
under the Terms Agreement (including the provisions of this
Agreement), including the issuance and sale of the Offered
Securities, will not, (i) violate the certificate or articles of
incorporation or by-laws of NiSource or NiSource Finance, (ii)
violate any law, rule or regulation applicable to NiSource or
NiSource Finance and generally applicable to transactions of the
type contemplated by the Terms Agreement (including the
provisions of this Agreement) undertaken by issuers engaged in
businesses similar to the businesses of NiSource and NiSource
Finance, (iii) violate any judgment, injunction, order or decree
identified by an officer of NiSource or NiSource Finance as
material to NiSource, NiSource Finance and the Subsidiaries taken
as a whole (which judgments, injunctions, orders and decrees, if
any, shall be set forth in a certificate attached to the
opinion), or (iv) breach or result in a default under any
indenture, mortgage, instrument or agreement which is filed as an
exhibit to or filed as an exhibit through incorporation by
reference to [for opinions delivered prior to the date of filing
of NiSource's Annual Report on Form 10-K for the year ended
December 31, 2000: either the Annual Report on Form 10-K for the
year ended December 31, 1999 filed by NiSource Indiana, the
Annual Report on Form 10-K for the year ended December 31, 1999
filed by Columbia Energy, or any Quarterly Report on Form 10-Q or
Report on Form 8-K filed by NiSource] [for opinions delivered
subsequent to the date of filing of NiSource's Annual Report on
Form 10-K for the year ended December 31, 2000: either NiSource's
-22-
Annual Report on Form 10-K for the year ended on the December 31
preceding the date of delivery of such opinion or any Quarterly
Report on Form 10-Q or Report on Form 8-K filed subsequent to the
date of such Form 10-K];
(xv) The descriptions in the Registration Statement and
in the Prospectus of any statutes, legal and governmental
proceedings, contracts and documents, insofar as such statements
purport to constitute summaries of matters of law and legal
conclusions with respect thereto, are correct in all material
respects; and such counsel do not know of any legal or
governmental proceedings pending to which NiSource, NiSource
Finance or any Subsidiary is a party or to which any of their
respective properties is subject that are required to be
described in the Registration Statement or the Prospectus and are
not so described, or of any statutes, regulations, contracts or
other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not so described
or filed as required;
(xvi) The Registration Statement has become effective
under the Act, the Prospectus was filed with the Commission
pursuant to the subparagraph of Rule 424(b) specified in such
opinion on the date specified therein, and, to the best knowledge
of such counsel, no stop order suspending the effectiveness of
the Registration Statement or any part thereof has been issued
and no proceedings for that purpose have been instituted or are
pending or threatened under the Act, and the registration
statement relating to the Registered Securities, as of its
effective date, the Registration Statement and the Prospectus, as
of the date of the Terms Agreement, and any amendment or
supplement thereto, as of its date, complied as to form in all
material respects with the requirements of the Act, the Trust
Indenture Act and the Rules and Regulations; such counsel have
had no facts come to their attention that have led them to
believe that the Registration Statement, as of its effective
date, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that
the Prospectus, as supplemented as of the date of the prospectus
supplement or as of the Closing Date, contained or contains an
untrue statement of a material fact or omitted or omits to state
a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; it being understood that such counsel need
express no opinion as to the financial statements or other
financial data contained in the Registration Statement or the
Prospectus; and
-23-
(xvii) The Terms Agreement (including the provisions
of this Agreement) and, if the Offered Securities are debt
securities issued by NiSource Finance and guaranteed by NiSource
or preferred stock, the Delayed Delivery Contracts have been duly
authorized, executed and delivered by NiSource and/or NiSource
Finance, as the case may be.
(f) The Representatives shall have received from Dewey
Ballantine LLP, counsel for the Underwriters, such opinion or
opinions, dated the Closing Date, with respect to the incorporation of
each of NiSource and NiSource Finance, the validity of the Offered
Securities, the Registration Statement, the Prospectus and other
related matters as the Representatives may require, and each of
NiSource and NiSource Finance shall have furnished to such counsel
such documents as they request for the purpose of enabling them to
pass upon such matters. In rendering such opinion, Dewey Ballantine
LLP may rely as to the incorporation of NiSource Finance and all other
matters governed by Indiana law upon the opinion of Schiff Hardin &
Waite referred to above.
(g) The Representatives shall have received a certificate, dated
the Closing Date, of the President or any Vice President and a
principal financial or accounting officer of NiSource in which such
officers, to the best of their knowledge after reasonable
investigation, shall state that the representations and warranties of
NiSource in this Agreement are true and correct in all material
respects, that NiSource has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied hereunder at
or prior to the Closing Date, that no stop order suspending the
effectiveness of the Registration Statement or of any part thereof has
been issued and no proceedings for that purpose have been instituted
or are contemplated by the Commission and that, subsequent to the date
of the most recent financial statements in the Prospectus, there has
been no material adverse change, nor any development or event
involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of
NiSource, NiSource Finance and the Subsidiaries taken as a whole
except as set forth in or contemplated by the Prospectus or as
described in such certificate.
(h) If the Offered Securities are debt securities, the
Representatives shall have received a certificate, dated the Closing
Date, of the President or any Vice President and a principal financial
or accounting officer of NiSource Finance in which such officers, to
the best of their knowledge after reasonable investigation, shall
state that the representations and warranties of NiSource Finance in
this Agreement are true and correct in all material respects, that
NiSource Finance has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date, that no stop order suspending the
effectiveness of the Registration Statement or of any part thereof has
been issued and no proceedings for that purpose have been instituted
-24-
or are contemplated by the Commission and that, subsequent to the date
of the most recent financial statements in the Prospectus, there has
been no material adverse change, nor any development or event
involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of
NiSource, NiSource Finance and the Subsidiaries taken as a whole
except as set forth in or contemplated by the Prospectus or as
described in such certificate.
(i) The Representatives shall have received a letter, dated the
Closing Date, of Arthur Andersen LLP (Chicago) which meets the
requirements of subsection (a) of this Section, except that the
specified date referred to in such subsection will be a date not more
than three days prior to the Closing Date for the purposes of this
subsection.
(j) The Representatives shall have received a letter, dated the
Closing Date, of Arthur Andersen LLP (New York) which meets the
requirements of subsection (b) of this Section, except that the
specified date referred to in such subsection will be a date not more
than three days prior to the Closing Date for the purposes of this
subsection.
Each of NiSource and NiSource Finance agrees to furnish the
Representatives with such conformed copies of such opinions,
certificates, letters and documents as the Representatives reasonably
request. The Lead Underwriter may in its sole discretion waive on
behalf of the Underwriters compliance with any conditions to the
obligations of the Underwriters under this Agreement and the Terms
Agreement.
6. INDEMNIFICATION AND CONTRIBUTION. (a) NiSource and
NiSource Finance, jointly and severally, will indemnify and hold
harmless each Underwriter, its partners, directors and officers and
each person, if any, who controls such Underwriter within the meaning
of Section 15 of the Act, against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become
subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, the Prospectus,
or any amendment or supplement thereto, or any related preliminary
prospectus or preliminary prospectus supplement, or arise out of or
are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such
loss, claim, damage, liability or action as such expenses are
incurred; PROVIDED, HOWEVER, that NiSource and NiSource Finance will
not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue
-25-
statement or alleged untrue statement in or omission or alleged
omission from any of such documents in reliance upon and in conformity
with written information furnished to NiSource or NiSource Finance by
any Underwriter through the Representatives, if any, specifically for
use therein, it being understood and agreed that the only such
information furnished by any Underwriter consists of the information
described as such in the Terms Agreement; AND PROVIDED, FURTHER, that
with respect to any untrue statement or alleged untrue statement in or
omission or alleged omission from any preliminary prospectus or
prospectus supplement the indemnity agreement contained in this
subsection (a) shall not inure to the benefit of any Underwriter from
whom the person asserting any such loss, claim, damage or liability
purchased the Offered Securities concerned, to the extent that a
prospectus or prospectus supplement relating to such Offered
Securities was required to be delivered by such Underwriter under the
Act in connection with such purchase and any such loss, claim, damage
or liability of such Underwriter results from the fact that there was
not sent or given to such person, at or prior to the written
confirmation of the sale of such Offered Securities to such person, a
copy of the prospectus or prospectus supplement (exclusive of
material incorporated by reference) if NiSource or NiSource Finance
had previously furnished copies thereof to such Underwriter.
(b) Each Underwriter will severally and not jointly
indemnify and hold harmless NiSource and NiSource Finance, their
respective directors and officers and each person, if any, who
controls each of NiSource and NiSource Finance within the meaning of
Section 15 of the Act, against any losses, claims, damages or
liabilities to which NiSource or NiSource Finance may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus
or preliminary prospectus supplement, or arise out of or are based
upon the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in
conformity with written information furnished to NiSource or NiSource
Finance by such Underwriter through the Representatives, if any,
specifically for use therein, and will reimburse any legal or other
expenses reasonably incurred by NiSource or NiSource Finance in
connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred, it being
understood and agreed that the only such information furnished by any
Underwriter consists of the information described as such in the Terms
Agreement.
(c) Promptly after receipt by an indemnified party under
this Section of notice of the commencement of any action, such
-26-
indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under subsection (a) or (b) above,
notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise
than under subsection (a) or (b) above. In case any such action is
brought against any indemnified party and it notifies the indemnifying
party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish,
jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and after
notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party under this Section for any
legal or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any
pending or threatened action in respect of which any indemnified party
is or could have been a party and indemnity could have been sought
hereunder by such indemnified party unless such settlement (i)
includes an unconditional release of such indemnified party from all
liability on any claims that are the subject matter of such action and
(ii) does not include a statement as to, or an admission of, fault,
culpability or a failure to act by or on behalf of an indemnified
party.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party
under subsection (a) or (b) above, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as
a result of the losses, claims, damages or liabilities referred to in
subsection (a) or (b) above (i) in such proportion as is appropriate
to reflect the relative benefits received by NiSource and NiSource
Finance on the one hand and the Underwriters on the other from the
offering of the Offered Securities or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of
NiSource and NiSource Finance on the one hand and the Underwriters on
the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities as well as any
other relevant equitable considerations. The relative benefits
received by NiSource and NiSource Finance on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting
expenses) received by NiSource and NiSource Finance bear to the total
underwriting discounts and commissions received by the Underwriters.
The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material
-27-
fact or the omission or alleged omission to state a material fact
relates to information supplied by NiSource and NiSource Finance on
the one hand or the Underwriters on the other and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The amount paid
by an indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this subsection (d)
shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any action or claim which is the subject of this subsection
(d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of
the amount by which the total price at which the Offered Securities
underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this subsection (d) to contribute are several in
proportion to their respective underwriting obligations and not joint.
(e) The obligations of NiSource and NiSource Finance under
this Section shall be in addition to any liability which NiSource or
NiSource Finance may otherwise have and shall extend, upon the same
terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section shall be in addition to any liability
which the respective Underwriters may otherwise have and shall extend,
upon the same terms and conditions, to each director of NiSource and
NiSource Finance, to each officer of NiSource and NiSource Finance who
has signed the Registration Statement and to each person, if any, who
controls NiSource or NiSource Finance within the meaning of the Act.
7. DEFAULT OF UNDERWRITERS. If any Underwriter or Underwriters
default in their obligations to purchase Offered Securities under the
Terms Agreement and the aggregate principal amount (if debt
securities) or number of shares (if preferred stock or Common Stock)
of Offered Securities that such defaulting Underwriter or Underwriters
agreed but failed to purchase does not exceed 10% of the total
principal amount (if debt securities) or number of shares (if
preferred stock or Common Stock) of Offered Securities, the Lead
Underwriter may make arrangements satisfactory to NiSource and/or
NiSource Finance, as the case may be, for the purchase of such Offered
Securities by other persons, including any of the Underwriters, but if
no such arrangements are made by the Closing Date, the non-defaulting
Underwriters shall be obligated severally, in proportion to their
respective commitments under the Terms Agreement (including the
provisions of this Agreement), to purchase the Offered Securities that
such defaulting Underwriters agreed but failed to purchase. If any
Underwriter or Underwriters so default and the aggregate principal
-28-
amount (if debt securities) or number of shares (if preferred stock or
Common Stock) of Offered Securities with respect to which such default
or defaults occur exceeds 10% of the total principal amount (if debt
securities) or number of shares (if preferred stock or Common Stock)
of Offered Securities and arrangements satisfactory to the Lead
Underwriter and NiSource and/or NiSource Finance, as the case may be,
for the purchase of such Offered Securities by other persons are not
made within 36 hours after such default, the Terms Agreement will
terminate without liability on the part of any non-defaulting
Underwriter or NiSource or NiSource Finance, except as provided in
Section 8. As used in this Agreement, the term "Underwriter" includes
any person substituted for an Underwriter under this Section. Nothing
herein will relieve a defaulting Underwriter from liability for its
default. If the Offered Securities are debt securities or preferred
stock, the respective commitments of the several Underwriters for the
purposes of this Section shall be determined without regard to
reduction in the respective Underwriters' obligations to purchase the
principal amounts (if debt securities) or numbers of shares (if
preferred stock) of the Offered Securities set forth opposite their
names in the Terms Agreement as a result of Delayed Delivery Contracts
entered into by NiSource and/or NiSource Finance, as the case may be.
8. SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS. The
respective indemnities, agreements, representations, warranties and
other statements of NiSource, NiSource Finance or their respective
officers and of the several Underwriters set forth in or made pursuant
to the Terms Agreement (including the provisions of this Agreement)
will remain in full force and effect, regardless of any investigation,
or statement as to the results thereof, made by or on behalf of any
Underwriter, NiSource, NiSource Finance or any of their respective
representatives, officers or directors or any controlling person, and
will survive delivery of and payment for the Offered Securities. If
the Terms Agreement is terminated pursuant to Section 7 or if for any
reason the purchase of the Offered Securities by the Underwriters is
not consummated, NiSource and NiSource Finance shall remain
responsible for the expenses to be paid or reimbursed by it pursuant
to Section 4 and the respective obligations of NiSource, NiSource
Finance and the Underwriters pursuant to Section 6 shall remain in
effect. If the purchase of the Offered Securities by the Underwriters
is not consummated for any reason other than solely because of the
termination of the Terms Agreement pursuant to Section 7 or the
occurrence of any event specified in clause (iii), (iv) or (v) of
Section 5(d), NiSource and/or NiSource Finance will reimburse the
Underwriters for all out-of-pocket expenses (including fees and
disbursements of counsel) reasonably incurred by them in connection
with the offering of the Offered Securities.
9. NOTICES. All communications hereunder will be in writing
and, if sent to the Underwriters, will be mailed, delivered or
telegraphed and confirmed to them at their address furnished to
NiSource in writing for the purpose of communications hereunder or, if
sent to NiSource, will be mailed, delivered or telegraphed and
-29-
confirmed to it at 801 East 86th Avenue, Merrillville, Indiana 46410,
Attention: Francis P. Girot or, if sent to NiSource Finance, will be
mailed, delivered or telegraphed and confirmed to it at 801 East 86th
Avenue, Merrillville, Indiana 46410, Attention: Francis P. Girot, in
each case with a copy to Peter V. Fazio, Jr., Schiff Hardin & Waite,
6600 Sears Tower, Chicago, Illinois 60606-6473.
10. SUCCESSORS. The Terms Agreement (including the provisions of
this Agreement) will inure to the benefit of and be binding upon
NiSource, NiSource Finance and such Underwriters as are identified in
the Terms Agreement and their respective successors and the officers
and directors and controlling persons referred to in Section 6, and no
other person will have any right or obligation hereunder.
11. REPRESENTATION OF UNDERWRITERS. Any Representatives will
act for the several Underwriters in connection with the financing
described in the Terms Agreement, and any action under such Terms
Agreement (including the provisions of this Agreement) taken by the
Representatives jointly or by the Lead Underwriter will be binding
upon all the Underwriters.
12. COUNTERPARTS. The Terms Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and
the same Agreement.
13. APPLICABLE LAW. THIS AGREEMENT AND THE TERMS AGREEMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
Each of NiSource and NiSource Finance hereby submits to the non-
exclusive jurisdiction of the Federal and state courts in the Borough
of Manhattan in The City of New York in any suit or proceeding arising
out of or relating to the Terms Agreement (including the provisions of
this Agreement) or the transactions contemplated thereby.
Dated: November 30, 2000
-30-
ANNEX I
(Three copies of this Delayed Delivery Contract should be signed and
returned to the address shown below so as to arrive not later than
9:00 A.M., New York time, on [_____________], 200_)
DELAYED DELIVERY CONTRACT
[Insert date of initial public offering]
[NISOURCE INC.] [NISOURCE FINANCE CORP.]
c/o ________________________________
Gentlemen:
The undersigned hereby agrees to purchase from [NiSource Inc., a
Delaware corporation ("NISOURCE"),] [NiSource Finance Corp., an
Indiana corporation and wholly-owned subsidiary of NiSource
Inc.("NISOURCE FINANCE")] and [NISOURCE] [NISOURCE FINANCE] agrees to
sell to the undersigned, as of the date hereof, for delivery on
[________], 200_ ("Delivery Date"), [__________ shares]
[$______________ principal amount] [of [NiSource's] [ NiSource
Finance's] [insert title of securities] ("Securities"), offered by the
Prospectus of NiSource and NiSource Finance dated [________], 200_ and
a Prospectus Supplement dated [________], 200_ relating thereto,
receipt of copies of which is hereby acknowledged, at- % of the
principal amount thereof plus accrued interest, if any,-$ per
share plus accrued dividends, if any,-and on the further terms and
conditions set forth in this Delayed Delivery Contract ("Contract").
[IF TWO OR MORE DELAYED CLOSINGS, INSERT THE FOLLOWING:
The undersigned will purchase from [NiSource][NiSource Finance]
as of the date hereof, for delivery on the dates set forth below,
Securities in the-principal-amounts set forth below:
Delivery Date [Number of Shares/Principal Amount]
........................ ......................
........................ ......................
Each of such delivery dates is hereinafter referred to as a Delivery
Date.]
Payment for the Securities that the undersigned has agreed to purchase
for delivery on-the-each-Delivery Date shall be made to
[NiSource][NiSource Finance] or its order in Federal (same day) funds
by certified or official bank check or wire transfer to an account
designated by [NiSource][NiSource Finance] at a bank acceptable to the
Underwriter, at the office of at A.M. on-
the-such-Delivery Date upon delivery to the undersigned of the
Securities to be purchased by the undersigned-for delivery on such
Delivery Date-in definitive [IF DEBT ISSUE, INSERT-fully registered]
form and in such denominations and registered in such names as the
undersigned may designate by written or telegraphic communication
addressed to [NiSource][NiSource Finance] not less than five full
business days prior to-the-such-Delivery Date.
It is expressly agreed that the provisions for delayed delivery
and payment are for the sole convenience of the undersigned; that the
purchase hereunder of Securities is to be regarded in all respects as
a purchase as of the date of this Contract; that the obligation of
[NiSource][NiSource Finance] to make delivery of and accept payment
for, and the obligation of the undersigned to take delivery of and
make payment for, Securities on-the-each-Delivery Date shall be
subject only to the conditions that (1) investment in the Securities
shall not at-the-such-Delivery Date be prohibited under the laws of
any jurisdiction in the United States to which the undersigned is
subject and (2) [NiSource][NiSource Finance] shall have sold to the
Underwriters the total-principal amount-number of shares-of the
Securities less the-principal amount-number of shares-thereof covered
by this and other similar Contracts. The undersigned represents that
its investment in the Securities is not, as of the date hereof,
prohibited under the laws of any jurisdiction to which the undersigned
is subject and which governs such investment.
Promptly after completion of the sale to the Underwriters
[NiSource][NiSource Finance] will mail or deliver to the undersigned
at its address set forth below notice to such effect, accompanied by-a
copy-copies-of the opinion[s] of counsel for [NiSource][NiSource
Finance] delivered to the Underwriters in connection therewith.
This Contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be
assignable by either party hereto without the written consent of the
other.
It is understood that the acceptance of any such Contract is in
[NiSource][NiSource Finance]'s sole discretion and, without limiting
the foregoing, need not be on a first-come, first-served basis. If
this Contract is acceptable to [NiSource][NiSource Finance], it is
requested that [NiSource][NiSource Finance] sign the form of
acceptance below and mail or deliver one of the counterparts hereof to
the undersigned at its address set forth below. This will become a
-2-
binding contract between [NiSource][NiSource Finance] and the
undersigned when such counterpart is so mailed or delivered.
Yours very truly,
.........................................
(Name of Purchaser)
By ......................................
[Name/Title]
.........................................
.........................................
(Address of Purchaser)
Accepted, as of the above date.
[NISOURCE INC.] [NISOURCE FINANCE CORP.]
By ....................................
[Insert Title]
-3-
